CARRIAGE OF GOODS CARRIAGE UNDER BILLS OF LADING

Bills of Lading 1[1]

bill of lading (B/L) issued by a CR upon receipt of goods for transport from one port to another. CR provides form; SH fills out terms function of B/L o receipt CR received specific goods from SH o evidence of contract of affreightment CR agrees to transport SH goods from one place to another place for a price o document of delivery allows CR to identify party to whom delivery is to be made, and CR releases goods to holder of B/L o sometimes serves as document of title non-negotiable B/L are necessarily documents of title. J.C.B. Sales v. Wallenius Lines whether parties incorporating the Hague-Visby rules as enacted in country of shipment demonstrate a sufficiently clear intent to increase limit of CR liability in excess of COGSA limit o yes - J.C.B. Sales v. Wallenius Lines o no - Acciai Speciali Terni U.S.A. v. M/V Beraine

Developments Since the Enactment of COGSA2[2] THE SHIPPER'S PRIMA FACIE CASE
SH cargo claim against CR SH prima facie case goods damaged in CR's custody good order/bad order plaintiff shows that goods were delivered to CR in good condition, and delivered back to SH or CI in bad condition nature of damage nature of damage suffered indicates that damage must have occurred in CR custody. Transatlantic Marine Claims Agency v. M/V OOCL Inspiration (presence of salt water indicates damage occurred at sea) o failure of prima facie case results in DISMISSAL CR rebuts prima facie case due diligence CR shows that he exercised due diligence to prevent the damage, or 1304(2) exception harm caused by 1304(2) exception o failure to show due diligence or 1304(2) exception results in LIABILITY FOR LOSS SH or CI rebuts due diligence or exception negligence of CR was a concurrent cause of the loss o failure to show concurrent cause results in DISMISSAL CR allocates fault concurrent causes, carrier must pick damage apart or pay whole thing. The Vallescura. what part of loss was caused by his excepted cause; nearly impossible burden
1[1] Federal Bills of Lading 49 U.S.C. 80101-80116 Pomerene Act Recodified 2[2] The Visby Amendments, The Hamburg Rules and UNCTAD, MLA Proposed Compromise Between the Hague-Visby and the Hamburg Rules, Plans for a Comprehensive New Convention, Liner Conferences, the Shipping Act, and the Code of Liner Conduct, The Coverage of COGSA and the Multimodal and Container Revolution, Period of Responsibility

failure to allocate fault for loss results in FULL LIABILITY

prima facie effect of clean B/L ordinarily prima facie evidence of delivery in good condition no prima facie evidence, when goods shipped in packages which prevent CR from observing damaged condition which may have existed when loaded. Caemint Food v. Brasileiro o SH must show by a preponderance of the evidence that goods were delivered to vessel in good order and condition B/L must contain no limiting language such as "shipper's load and count," or contain terms which CR can verify in order to constituted prima facie evidence of good delivery. Plastique Tags v. Asia Trans Line order B/L CR liable for loss of goods resulting from delivery to wrong person. Allied Chemical v. Companhia de Navegacao only holder of order B/L entitled to delivery of goods CR may not disclaim all post-discharge liability (Harter)3[3] removal of goods into custody of person entitled to delivery under contract is prima facie evidence of the delivery as described in B/L. COGSA 1303(6) o unless notice of loss or damage and a description is given in writing to CR at port of discharge before or at time of removal of goods o prima facie evidence in this situation is easily overcome proper delivery Harter CR required to make proper delivery of goods to be discharged of liability to SH or CI 46 U.S.C. 190 o proper delivery delivery to CI in B/L at a fit and proper wharf w/duty to give reasonable notice to CI of arrival, with reasonable opportunity for pick up, and duty on CI to receive. Farrell Lines v. Highlands Insurance exception unless provided otherwise by port of discharge. o CR liable for damage/loss until proper delivery is made COGSA CR period of responsibility runs only from loading to unloading o delivery only important for determination of start of statute of limitations

RESPONSIBILITIES OF THE CARRIER

Due Diligence to Make the Ship Seaworthy4[4]

CR shall be bound before and at the beginning of the voyage, to exercise due diligence to o make the ship seaworthy o properly man, equip, and supply the ship o CR need not insure seaworthiness, only due diligence o Harter v. COGSA absence of due diligence Harter CR liable even if not at fault in the absence of due diligence, CR can not enjoy the Harter Act's exemptions. United States v. Ultramar Shipping COGSA CR liable only if at fault as a result of the lack of due diligence transfer of cargo to lightering vessel is considered discharge and losses incurred during lighterage are ordinarily subject to Harter Act, not COGSA. United States v. Ultramar Shipping United States v. Ultramar Shipping (the Cherry Laju) o test of seaworthiness - whether the vessel is reasonably fit to carry the cargo which she has undertaken to transport.

3[3] COGSA applies to B/L from time cargo loaded on to time cargo loaded off; Harter applies prior to loading and after discharge 4[4] Harter 46 U.S.C. 192; COGSA 46 U.S.C. 1303(1)(a)

Seaworthiness is . . . a relative term. It is to be considered in relation to the voyage undertaken, the cargo to be carried, and its stowage; seaworthiness does not require perfection in a vessel. duty to make a vessel seaworthy requires a vessel be safely loaded and properly stowed. includes duty of due care in selection of master and crew

Due Diligence in the Handling of the Goods5[5] COGSA CR shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried o non-delegable duty CR may contract control of loading and stowing operations over to SH or CI; SH or CI responsible for loading and stowing, CR still has duty of due diligence in the handling of the goods duty creates prima facie case against CR, even where SH or CI was responsible for loading and stowing, and CR cargo loss or damage resulted from act or omission of SH or CI in loading and stowing not enough that CR contracted out of responsibility

RIGHTS AND IMMUNITIES OF THE CARRIER AND SHIP

Ping - Pong Game o cargo shows prima facie case (good order/ bad order) o CR shows defense - 1304(1) or 1304(2) exception o cargo claims lack of due diligence (un-seaworthiness) o CR rebuts

Loss Caused by Un-seaworthiness Despite Due Diligence . . . loss from un-seaworthiness unless resulting from want of due diligence. 46 U.S.C. 1304(1) where loss or damage results from un-seaworthiness, and o CR failed to exercise due diligence actionable under COGSA for damages o CR exercised due diligence 1304(1) relieves CR of liability for loss caused to the goods by unseaworthiness of the vessel. Complaint of Tecomar, S.A. where loss or damage results from latent defects CR exonerated where loss due to latent defect. Tata v. Farrell Lines where CR failed to exercise due diligence, but loss resulted from error in navigation or mismanagement: o COGSA CR not liable b/c loss not resulting from failure of due diligence; COGSA requires causal connection. United States v. Ultramar o Harter CR liable b/c of failure to exercise due diligence regardless of cause of loss Errors in Navigation or Management . . . loss arising from act, neglect, or default of master, mariner, pilot, or servants of CR in navigation or management of ship. 46 U.S.C. 1304(2)(a).6[6] Un-seaworthiness vs. Error in Management or Navigation - 1303(1)(a), 1304 v. 1304(2)(a) o Harter due diligence requires that ship be made in all respects seaworthy, which includes diligence on the part of owner's servants in the use of the equipment. International Navigation v. Farr & Bailey o CR not liable for faults of master in the navigation or management of ship (nautical fault) 1304(2)(a) Proper Care of the Cargo vs. Error in Management or Navigation - 1303(2) v. 1304(2)(a)

5[5] 46 U.S.C. 191; 46 U.S.C. 1303(2) 6[6] generally, courts are reluctant to find that fault falls within 1304(2)(a); unattractive defense thus, where cause of loss can be characterized as either management of the ship or failure of crew to properly load, stow, etc., the cargo, court will likely favor latter interpretation.

CR shall properly and carefully load, handle, stow, carry, keep, care for, and discharge goods carried. 46 U.S.C. 1302 important point since un-seaworthiness is relative term, failure to close port holes in one instances may be an error in management of the ship under 1304(2)(a), while in another instance may be a failure of due diligence on part of servants w/resp. to equipment, and amount to un-seaworthiness. poor trimming of ship found to be improper handling of cargo, not error in management of vessel. Knott v. Botany Worsted Mills distinction b/t cargo issues and navigation or management issues. faults tied to cargo vs. faults tied to management or navigation when it is both, determination must be made as to which it is primarily. The Germanic COGSA Goes Overland. Mannesman Demag v. M/V Concert Express COGSA - not applicable to inland portion of carriage for shipment of cargo only applicable from time loaded on to time loaded off terms of COGSA may be incorporated into B/L for inland transport, though applies only as a contractual term, which may be overcome if conflicts w/applicable law Harter Act not compulsorily applicable to inland portion of carriage for shipment of cargo; proper delivery under Harter Act occurs when cargo is ready for inland transport.

Perils of the Sea7[7] 46 U.S.C. 1304(2)(c) . . . loss resulting from perils, dangers, and accidents of sea or other navigable water. 46 U.S.C. 1304(2)(c). vs. Negligence in Handling the Cargo8[8] - 1304(2)(c) v. 1303(2) o where loss results from Perils of the Sea as well as negligence in handling cargo, CR must be able to pick the damage apart or pay the whole thing. The Vallescura (sweaty onions). Vallescura analysis SH must show good order/bad order CR demonstrates that damage/loss resulted from a peril of the sea SH shows that damage/loss resulted from fault on part of CR o now we have a situation where there is peril of the sea and negligence CR must show how much of the damage resulted from fault of CR, and how much resulted from peril of the sea o if carrier can not do this, carrier must pay the whole thing o CR rarely prevails in this scenario vs. Unexcused Un-seaworthiness - 1304(2)(c) v. 1303(1) o CR burden of proof duty w/resp. to loss resulting from un-seaworthiness and loss resulting from excepted cause may, in some cases, be virtually impossible, but the duty holds. Edmond Weil v. American West African Line o perils of the sea defense requires additional showing by CR of freedom from negligence. Taisho Marine & Fire v. M/V Sea-Land Endurance this exception does not allow for excepted negligence Other Immunities three general categories of immunity under COGSA 1304(2) o overwhelming outside human forces o overwhelming natural forces o faults of the SH what is the effect of CR contributory or concurrent fault? o CR may be totally excused if fault itself is immune as an error of navigation or management o fault completely prevents application of immunity if absence of human negligence is part of the immunity o presence of contributory fault requires CR to which part of loss caused by immunity and which part by fault

7[7] perils of the sea fortuitous action of elements at sea, of such force as to overcome strength of a well-found ship or usual precautions of good seamanship 8[8] CR perils of the sea defense is almost always met by cargo's un-seaworthiness claim

Inherent Vice 46 U.S.C. 1304(2)(m) . . . loss/damage resulting from wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods inherent vice any existing defect, disease, decay, or inherent nature of commodity which would cause it to deteriorate over a lapse of time in response to inherent vice, SH must show o good condition at delivery o such condition that it would not have gone bad during voyage. United States Steel v. M.T. Granheim o SH disproves inherent vice whether SH must disprove inherent vice, or CR must disprove inherent vice o 2nd Circuit SH must disprove inherent vice o 5th Circuit CR must disprove inherent vice Restraint of Princes - 1304(2)(g) . . . resulting from arrest or restraint of princes, rulers, or people, or seizure under legal process to shield CR from liability, restraint must be proximate cause of loss. Sedco v. S.S. Strathewe restraint of princes involves a more orthodox ping pong game. Lekas & Drivas, v. Goulandris (spoilage of cheese) o SH good order/ bad order o CR restraint of princes o SH must produce evidence that shows CR failed to exercise due diligence, but for which loss would not have occurred should have sold the cheese at first stop in Aden diligence w/resp. to the cargo in Aden would have saved the cargo The Q Clause 46 U.S.C. 1304(2)(q) . . . resulting from any other cause arising w/o actual fault of CR and w/o fault or neglect of agents or servants of CR o rarely works if damage to cargo is a mystery, SH wins; CR must be able to prove cause of damage whether a seaman's willful act is an excepted cause of cargo loss under the Q clause that exculpates CR/employer from liability In re Intercontinental Properties Management Gun-Gun Supardi o easy answer no, seaman's willful act is not an excepted cause o hard answer court declines to read the Q clause to require seaman to be in the course of his employment burden for explaining loss, even unexplained or unexplainable loss, is on person claiming exception to show that neither actual fault or privity of CR, nor fault or neglect of agents or servants of CR contributed to loss or damage Quaker Oats v. M/V Torvanger Fire 46 U.S.C. 1304(2)(b); 28 U.S.C. 182(1851) . . . resulting from fire, unless caused by actual fault or privity of CR the Fire Statute 182 exonerates shipowner from liability unless fire caused by design or neglect9[9] of owner o CR shows that damage was caused by fire, SH must prove that CR negligence caused the damage; this is done by proving: negligent act of CR caused fire negligent act of CR prevented fire's extinguishment o fire ping-pong game. Complaint of Ta Chi Navigation SH shows good order/bad order CR shows damage caused by fire10[10] 2nd, 5th, 11th Circuits SH must then prove fire caused by design or neglect of CR. Westinghouse Electric Corporation v. Leslie Lykes. o neglect of actual CR, not agents or servants o very difficult burden to carry
9[9]neglect negligence, not breach of non-delegable duty 10[10] first two steps of ping-pong game not difficult to show in fire cases

no fire fighting equipment on the vessel this would, though, make the vessel unseaworthy which, generally the carrier is responsible for showing that it exercised due diligence with respect to un-seaworthiness 9th Circuit CR responsible for showing that its fault did NOT cause the fire. Nissan Fire & Marine Ins. Co., Ltd. v. M/V Hyundai Explorer o under this standard, due diligence with respect to un-seaworthiness is a pre-requisite to raising 1304(2)(b) overview - >both of these views are still fairly pro-CR o either way, CR may not be liable through actions of agents or servants

DAMAGES AND LIMITATION OF LIABILITY

Measure of Damages. Santiago v. Sea-Land Service, Inc. measure of damages in cargo claims market value at port of destination when goods damaged rather than lost difference b/t sound market value at port, and market value of goods in damaged condition wrongfully delayed cargo difference b/t market value at time of delivery and market value when actually delivered when no market for damaged cargo exists at port market value of nearest port is used when goods can be reconditioned to realize market value damages limited to reconditioning costs 1304(5) Package Limitation liability of CR or ship $500 per package or, where goods not shipped in packages, per customary freight unit Hague Rules US uses dollars, not gold sovereigns; US wording places great emphasis on presence or absence of a package Visby Amendments - defines liability limitation it in termms of gold francs bad idea price of gold is unstable SDR Protocol (1978) defines limit of liability in terms of SDR o 666.67 SDR or 2 SDR per kilograms, whichever is more o most countries used Visby/SDR Protocol; US still uses $500 limitation point is generally raised in partial summary o judgment what is a package?11[11] COGSA # of packages specified in the # of packages column of B/L generally controls Monica Textile Rule- where B/L discloses on its face what's inside container(s) and those contents may reasonably be considered COGSA packages, contents themselves, not container(s), are COGSA packages. Monica Textile v. S.S. Tana o B/L is ambiguous on its face, and certain clauses are un-bargained-for boiler plate, SH and CR have not unequivocally agreed to treat container as COGSA package unpackaged items within containers if items inside container can not reasonably be considered COGSA packages, then container is a package; container is held to be a package where items inside container are not wrapped, bundled, or tied. intent of parties parties may define package as they see fit in B/L. Commonwealth Petrochemicals v. S.S. Puerto Rico o where COGSA does not apply ex proprio vigore12[12], parties' definition of package controls, even where contradictory to that under COGSA13[13] o large item in shipping crate one COGSA package. Vistar S.A. v. M/V Sealand Express customary freight unit limited to unpackaged goods

11[11] important to consider intent of parties 12[12] ex proprio vigore as it usually would? 13[13] although, limitation of liability by use of COGSA terms where COGSA does not apply is valid; limitation of liability outside of what COGSA allows where COGSA does apply is invalid

SH has the option of declaring the value of cargo on B/L; this would incur additional charge for ad valorem14[14] freight charge customary freight unit (CFU) o what is the unit? entire shipment (30 tractors) each unit of the shipment (per tractor) per ton (13 tons/ tractor) o we look not at the customary practice not of the industry, but of the carrier carrier's tariff (CT) list of carrier's rates for shipping CFU is determined by the CT CT by virtue of being registered w/federal gov't, becomes the law Fair Opportunity Rule Fair Opportunity to Declare a Higher Value o unless carrier has given opportunity to cargo to declare a higher value, carrier has no right to limit liability (specific to the United States) almost never applies blank space on B/L qualifies as "opportunity" generally, shipper never declares value of cargo on B/L too expensive o ad valorem freight rate based on value of cargo rather than quantity o SH will not often ship ad valorem because they already have bought insurance on the goods target factor declaring value essentially putting a target on cargo saying "steal this one"

Who Is the COGSA Carrier? not always particularly clear because of all of the parties/countries involved guiding principle who signed the bill of lading and for whom did they sign it? initial presumption ship-owner is generally assumed to be the CR o ship-owner is carrying the goods COGSA plaintiffs may only recover from CR of cargo; plaintiffs must establish party executed contract of carriage CR includes owner or charterer who enters contract of carriage w/SH voyage charterer charters ship on behalf of cargo. Pacific Employers Insurance Company v. M/V Gloria o a different creature from the TC or the DC o B/L signed by party ". . . AS AGENTS BY AUTHORITY OF THE MASTER" establishes agency b/t signing party and master where voyage charterer bears responsibility to load, stow, and discharge cargo, this alone is not sufficient to establish voyage charterer as a CR for the master language alone does not determine liability o with authority of shipowner binds shipowner and places shipowner within provisions of COGSA o without authority of shipowner shipowner is not personally bound, and does not by virtue of charterer's signature become COGSA carrier potential problem finding out whether B/L signed with or without authority of shipowner everyone must be sued; this of course is also difficult to do agency in maritime law. Cactus Pipe & Supply Co. Inc. v. M/V Montmartre o apparent agency vs. actual agency actual agency representations made by principal to agent apparent agency representations made by principal to third party actions of agent are irrelevant to apparent agency inquiry o punch-line since Cactus can not sue Orient in personam, Cactus sues the boat itself in rem vessel may be held liable in rem in absence of in personam cause of action against vessel owner doctrine of ratification when cargo is loaded upon the vessel and B/Ls have been issued, B/Ls become binding contract of the vessel in rem upon sailing of vessel w/cargo it does not matter who signed or who was responsible for signing B/L ship can always be liable

14[14] ad valorem determined by its proportion, rather than a flat rate

goes hand in hand with personification purpose to allow cargo to recover and make SO & TC/DC figure it out among themselves one small flaw must be able to find the ship in your jurisdiction security given by carrier (usually 100,000) to prevent the arrest of ship if the ship can't be found, this does not work because the ship may not report back to port inside of one year

Extension of COGSA Defenses, Immunities, and Limitations to Non-Carriers

The Himalaya Clause seeks to extend to non-carriers partial immunity or other protections afforded to the carrier by B/L o a clear and unequivocal Himalaya Clause in the B/L will be given effect to extend to the stevedore, as agent or subcontractor of carrier, the benefit of $500 limitation of liability Himalaya Clauses are valid except where person invoking clause attempts to escape all liability for negligence/fault of employees Grace Line, Inc. v. Todd Shipyards Corporation whether shipyard owner is protected under COGSA by way of a Himalaya Clause o contract purporting to grant immunity from liability must be strictly construed and limited to intended beneficiaries; should not be held to limited liability of tort feasor unless clarity of language used expresses that to be the understanding of contracting parties Herd v. Krawill Machinery 9th Circuit interprets this to mean that a clear Himalaya Clause will be given effect Himalaya Clause does not work for mistake of navigation or management Congress only intended carriers to have this particular defense trying to extend this by contract would be trying to contract out of liability for its own fault Deviation Basis for Liability originally, any deviation amounted to breach; COGSA only unreasonable deviation amounts to breach C.A. Articulos Nacionales de Goma Gomaven v. M/V Aragua o Causal Relationship there must be a causal relationship b/t deviation and loss, and lack of causation is a defense which must be sustained by CR where stop was made at port which was not an advertised port of call and not along ordinary trade route, stop constituted an deviation o deviation was unreasonable where it exposed vessel to greater weather risks and was performed solely for the benefit of the vessel. General Electric v. Steamship Nancy Lykes deviation can only be considered customary, and consent can only be inferred, where SH had knowledge that stops would be made liberty clauses which are so broad as to eliminate possibility of unreasonable deviation are void as allowing a CR to contract out of liability Quasi-Deviation o broader than geographic deviation, which is simply going somewhere other than where you were supposed to go o general rationale for deviation many insurance policies are void if there was deviation held covered clause generally hold that the vessel is still insured if the vessel deviates basis for doctrine carrier increases the risks which the cargo anticipated; this makes him liable simple non-delivery shipper's insurance remains in effect; non-delivery is within the contemplation of the parties, and covered by shipper's insurance; it is simply breach of contract and not worthy of being elevated to deviation; only if what the carrier has done goes outside of doing something within the scope of contract that it becomes a deviation Land-Based Deviation where COGSA is applied to entire transportation, including ground, land based deviation may be possible Statutes of Limitations unreasonable deviation does not oust COGSA's one year statute of limitations

Exoneration Clauses FIO free in and out I carry your goods but you take them on and off the ship (if cargo has its own loading facilities) FIOS free in out and stowed FIOST free in out stowed and trimmed gross terms/liner terms carrier will put it on and off the ship FIGO free in and gross out cargo loads, carrier puts it off COGSA any limitation of liability within exculpatory clauses must be authorized by provisions of COGSA. Wessels v. The Asturias. Harter exculpatory clauses which attempt to contract out of all liability/shift liability to SH are invalid against public policy FIO clause and COGSA FIO clause allows CR to contract out of liability, which is not allowed under COGSA. Associated Metals & Minerals v. M/V Arktis Sky o rather than disclaiming liability, FIO clause creates a defense for CR (q clause amongst others) o CR must do the PINGPONG game, during which CR may claim applicable defenses under FIO clause15[15] 46 U.S.C. 1303(8) if CR puts exoneration clause into a B/L, and clause attempts to give the CR more protection than COGSA permits, than it is struck down to the extent that it occurs in the area covered by COGSA. Jamaica Nutrition Holdings v. United Shipping goods carried on deck16[16] COGSA limitation on liability excludes goods to be carried on deck. Chester v. Maritima del Litoral o 1301(c) goods carried on deck are outside of COGSA if stated as being carried on deck actually carried on deck o cargo to be carried on deck COGSA does not apply to this cargo; applicable elements of COGSA also do not apply; nothing in COGSA prevents the cargo from being carried on deck whether Harter should apply in the absence of COGSA courts split

Forum Selection Clauses pre-Sky Reefer COGSA barred forum selection clauses b/c of lessening of CR liability o motion to stay proceedings - defeated by lessening liability argument as well. Vimar Seguros Y Reaseguros, S.A. v. M/V Sky Reefer o nothing in COGSA prevents the parties from enforcing obligations in a forum of their choice; this is not a lessening of carrier's obligations at all o substantive obligations are not altered by a forum selection clause objection no guarantee that Japan will use COGSA o issue becomes whether the substantive law which will be applied will lower obligations below what COGSA requires o parties must adhere to forum selection clauses, and only when foreign forum actually grants less protection than COGSA would can parties return to United Sates courts will stay the proceedings until after the arbitration is held, and if less protection is given, then parties return to court NO ONE IS GOING TO DO THIS it essentially forces parties to settle every time, unless it can be shown at the interlocutory stage that the law of the other forum will eliminate protections under COGSA practical effect of Sky Reefer cargo is losing protection litigants must go to the foreign forums and have law actually applied unfairly, then come back an claim that COGSA was actually avoided

15[15] you may still be off the hook, but you must prove it; you can't just say 'I didn't do it'. 16[16] if SH has specified that cargo be carried below deck, and then CR carries it on deck, SH argues deviation; contract states that cargo is carried below and carrier deliberately subjected the cargo to most risk than was contemplated; the key to deck carriage remember the two elements of 1301(c)

based on an off hand comment comparing arbitration clauses and forum selection clauses in Sky Reefer, although this is an arbitration case, it has been applied consistently to forum selection clause even though this defies the logic of Sky Reefer Southern District of New York has refused to dismiss suit where they don't know whether COGSA will be applied by the foreign forum; disputes which involve foreign forums for cases, rather than arbitration, are not reviewable in order to insure that COGSA was imposed conditional dismissal vs. complete dismissal allows dismissal subject to certain conditions which, if not met, would allow the courts to revisit the issue cases which apply Sky Reefer unthinkingly 9th Circuit allowed a forum selection clause which provided for litigation in Korea, despite the fact that Korea does not even allow proceedings in rem. Fireman's Fund Insurance Co. v. M/V DSR ATLANTIC

Statute of Limitations incredibly important only one year in which to bring the claim 1303(6) one year after delivery of the goods or the date when goods should have been delivered o COGSA only applies tackle to tackle, but the Statute of Limitations runs a considerable time after the goods are discharged ("to tackle") when does delivery take place for the purposes of running of the time bar? o Mannesmann Demag v. M/V Concert Express when does the time bomb begin to run through B/L carrier agrees to carry more than just "tackle to tackle" B/L clause during the period where Harter would apply, COGSA applies by contract Mannesman no COGSA protection Atlantic argues Harter was applicable, so there is COGSA protection Harter Harter applicable until proper delivery, and statute of limitations begins afterwards Harter Act delivery occurs when the in land carrier has possession of the goods; delivery occurs when the carrier places the cargo into the custody of whoever is legally entitled to receive it from the carrier (Harter Act) Servicios-Expoarma, CA v. Industrial Maritime Carriers, Inc.

CHARTER PARTIES
charter party merely a contract; subject to rules governing contract formation comes into being when parties have a meeting of minds on essential terms does not have to be signed to be legally binding voyage charter ship engaged to carry a full cargo on a single voyage vessel manned and navigated by owner adaptable to any situation to move a shipload of cargo from one point to another time charter navigated and managed by owner's people, but under command of charterer carrying capacity taken by charter for fixed time for carriage of goods any where in world as many voyages as will fit into charter period demise or bareboat charter charterer takes over ship and mans and navigates her with his own people charterer becomes owner pro hac vice COGSA doesn't apply to charterparties charterparties concern the use of the vessel; COGSA concerns carriage of goods more equal bargaining power parties are free to negotiate their own terms DEMISE CHARTERS not many disputes arise between demise charter and ship owner whether the contract in question was a demise charter. United States v. Shea o no technical words necessary to form a demise charter o formation of demise charter simply requires intent to transfer possession, command, and control

demise charter vs. time charter who retains possession, command, and navigation of vessel by the intention of the parties, demise has exclusive possession and control of the vessel demise vs. bareboat often treated as synonymous demise charterer often referred to as a disponent owner; owner pro hac vice demise charterer becomes the disponent owner; any obligations which arise between the vessel and the rest of the world, it all relates to the demise charter Dant & Russell v. Dillingham Tug & Barge

TIME AND VOYAGE CHARTERS

time charter vs. demise charter who retains possession, command, and control? time charter vs. voyage charter whether charter is for carriage of goods or for use (commercial disposition) of the vessel o remuneration time charter pay hire to shipowner; voyage charter pays freight or lump sum freight to shipowner maritime lien suit against ship arises out of maritime lien against the ship o maritime lien only arises once the contract has begun to be performed o breach before the contract begins results in no maritime lien (at admiralty) when does a charter begin EAST, Inc. of Stamford Conn.. v. M/V Alaia o time charter performance begins upon delivery of ship delivery - time charter by definition, a time charter actually never gets delivery because if he did, it would become a demise charter delivery means handing over possession time charter never has possession practically speaking, delivery occurs when owner of vessel says, "I have arrived at your delivery point, and I am here for your disposition." o voyage charter performance begins upon loading of goods

Trip Time Charter a hybrid between time charter and voyage charter time chartering a ship for a single voyage why the distinction? o time charter requires that charterer pay for all running expenses (bunkers, etc.) during the trip o voyage charter simply pays a lump sum freight, and owner pays everything else decision to use a trip time charter depends on which would be more expensive, easier

CONTRACT FORMALITIES
meaning and effect of a stipulation in telex exchanges that there is a fixture subject to details, or SUB DETS GENCON CP. The Junior K o English View parties are free to stipulate that no binding contract shall come into existence despite agreement on essential until agreement on unmet terms is reached subject to details . . . means that the main terms were agreed but until the subsidiary terms and the details had also been agreed no contract existed subject details is a well-known expression in broking practice which is intended to entitle either party to resile from the contract if in good faith either party is not satisfied with any of the details as discussed between them. o American View details are unimportant and one can simply go back to the printed form if need be a fixture has resulted when the main terms have been agreed, despite the fact that it was still subject to details

TIME CHARTERS
Time Charter buying commercial disposition of vessel what would a time charterer want to know about his ship when do I get it; how much do I pay for it; how long do I get to carry; how fast is it; gas consumption; carrying capacity; seaworthiness/current condition; trading limits politics; insurance; vessel owner will not allow charter to go certain places without paying more (Persian Gulf, etc.); what kind of cargo can it carry Failure of Shipowner or Vessel to Comply with Terms of Charter Party Misrepresentations, Conditions, Warranties, etc. whether word warranty was used is unimportant Romano v. West India Fruit & Steamship Co.; creation of warranty turns on: o whether statement was positively and unequivocally made as a statement of fact o whether the natural tendency of the statement's making was to induce chartering of the vessel capacity of ship o where stevedores would be required to adopt out-of-the-ordinary methods of loading a ship (in this case, nesting pipes) in order to meet warranted ship capacity, there is breach of warranty Giannelis v. The Atlanta o master has an obligation to insure that the cargo is loaded in such a manner that won't hurt the ship where the capacity of the ship is in question, master has an additional obligation to instruct the correct manner of storage this becomes a breach on the part of the shipowner to insure the promised carrying capacity speed and fuel consumption o where ship failed to achieve speed and fuel efficiency claimed under contract, shipowner is liable Giannelis v. The Atlanta o remedy for party to contract who makes less profit than it expected because vessel was too slow damages and/or rescission Seaworthiness17[17] o Implied Warranty of Seaworthiness every charter implies a warranty by the owner that the vessel will be seaworthy unless the parties stipulate otherwise Neubros Corporation v. Northwestern National Insurance Co. knowledge by the charterer of the unseaworthy condition of the vessel will not deny him of his right to recover damages for breach of warranty agreements relieving owner of obligation under implied warranty of seaworthiness are not favored o Waiver of the Warranty of Seaworthiness a waiver of warranties may be enforced if it clearly communicates that a particular risk falls to the charterer; such waivers are strictly construed against makers Remedies of Charterer English Law o "with hull, machinery, and equipment in a thoroughly efficient state" an undertaking of seaworthiness o "that on delivery the ship is to be 'tight, staunch, strong, and in every way fitted for the service" undertaking of seaworthiness on delivery o "maintained in a thoroughly efficient state during service" warranty of seaworthiness will be a continuing one o charterer may refuse to accept unseaworthy vessel, giving owner opportunity to correct the defect; owner's failure constitutes repudiation and grants charterer right to terminate Remedies of Charterer American Law o once delivery of the vessel has been accepted, charterer is entitled to refuse to perform only if there is a material breach on part of owner which frustrates essential purpose of contract Off Hire On Hire vs. Off Hire whether the delay relates to the working of the cargo vs. a deficiency of the ship Un-seaworthiness Off hire or Repudiation
17[17] seaworthiness fitness of the vessel in design, structure, and condition to perform the task for which the vessel is chartered

repudiation by a charterer is permissible only where breach of owner's undertaking of seaworthiness is so substantial as to defeat or frustrate commercial purpose of charter. United States v. M/V Marilena P o Off Hire Clause where parties to charter have stipulated what happens if the boat goes off-hire, unseaworthiness does not create right to rescind.18[18] un-seaworthiness generally does not create right to repudiate, b/c it is contrary to common sense to think that contract may be ended for trifling breaches o duty of shipowner implied warranty of seaworthiness owner promises vessel shall be seaworthy upon delivery to charterer after delivery owner promises to keep vessel seaworthy, maintain the class only really necessary in situations of oral agreement o time charter vs. voyage charter hire obligations charterer pays hire under a time charter off-hire Clause 15 in the event of loss of time resulting from . . . the payment of hire and overtime shall cease for the time thereby lost; if charterer can't earn freight from vessel, he shouldn't be obligated to pay hire freight obligations charterer pays freight under a voyage charter Preventing the Working of the Vessel o in order to go off hire, cause must have prevented the working of the vessel. Woods Hole Oceanographic Institute v. United States o where damage to ship requires time for repair of damage, key inquiry is whether damage repair prevents working of the vessel. Steamship Knutsford Co. v. Barber & Co. underlying inquiry what is ship doing for time during which damage is repaired? crucial difference is it discharging cargo for the repairing of the ship or for the working of the ship o for repairs ship is off-hire o for working ship is on-hire "cargo operations" working for the charterer and thus on-hire if delay is for getting to the ship damage, it "goes to the owner's account" if the delay is for checking out cargo damage, it "goes to the charterer's account" Any Loss of Time o voyage taken purely for repair was on the vessel owner's time and not the charterer. Woods Hole Oceanographic Institute v. United States distinction between Knutsford and Woods Hole charterer in former still controlled vessel, while charterer in latter did not control vessel third party liability o where damage to chartered vessel resulting was foreseeable, and where it was foreseeable that damage to vessel would result in loss of use and hence lost profits, such profits were not too remote or unforeseeable to be recoverable in action against employer of pilot. Compania Pelineon de Navegacion, S.A. v. Texas Petroleum Co. o

Mutual Exceptions detention of time chartered vessel at an intermediate port under a quarantine regulation was not caused by a "deficiency of men," within clause of charter party relieving charterer from payment of hire in case of delay from such deficiency, but was through "restraint of princes or people" within a provision mutually excepting such cause, and the charterer is entitled to no deduction therefor.Clyde Commercial S.S. Co. v. West India S.S. Co. restraint of princes is treated as no delay (excused delay) which prevents even a consideration of the off-hire clause case is to be treated as if no delay had occurred

Restraint of Princes - Frustration

18[18] "cargo can not rescind for un-seaworthiness if the parties have stipulated what happens in the event of un-seaworthiness"

requisitioning of the vessel by government brings to an end the contract between the parties The Claveresk o charter is frustrated when it becomes clear that the delay will last long enough to prevent the charter from being of any use at all

Redelivery19[19] wear and tear vessel must be returned to the owner in the same condition in which is was received absent normal wear and tear. Compass Marine Corp. v. Calore Rigging Co o if damage exceeds normal wear and tear, this is prima facie against charterer when to return vessel o duration of charter generally stated with vagueness (there is an "overlap-underlap" period) because there is no guarantee where the ship is going to be on a specific date five years from now o can the owner give the charterer an order if there is a chance that the voyage will exceed the charter deadline if it can be reasonably expected that the voyage would end on time market affects this relationship when market is up, charterer wants to keep the vessel as long as possible when market is down, charterer wants to give up the vessel as soon as possible

Overlap and Under-lap fixed time charter charterer is entitled to reasonable overlap at charter rate about clause when there is an about clause, charterer is entitled to a reasonable overlap as well as a reasonable underlap Prebensens Dampskibelskabet A/S v. Munson S.S. Line o time specific about clause overlap beyond specified time requires payment of market rate charterer returns vessel within "under" period then re-charters at the new lower market rate. Britain S.S. Co. v. Munson S.S. Line o underlap there is a duty to run a voyage which brings charter into under-lap period, but there is no duty to run into overlap period even though one is provided Remedies: Damages Withdrawal20[20] clause 5: owner may withdraw ship from charterer's service for non-payment of hire or for any other breach clause 18: owner has a lien upon all cargoes and all sub-freights where shipowner withdraws ship upon CR non-payment of hire, issue becomes what to do with the cargo? Diana Co. Maritima, S.A. of P. v. Subfreights of S.S. Admiralty Flyer o owner is not going to get paid for dropping off cargo owner wants to get to paid o owner may try to exercise lien on cargo charterer is bankrupt and cargo does not owe money to owner under the lien o owner has a lien over money that is owed to time charterer (sub-freights) owner says to receiver instead of paying TC, pay me because of my lien receiver does not want to pay the wrong person, so receiver pays into court (an escrow) and lets the other parties figure it out trustee in bankruptcy says that withdrawal is effective immediately any money owed after the withdrawal is nullified no lien because withdrawal ended the contract Luckenbach rule there can be no withdrawal until cargo is re-landed or until the cargo is discharged court rules that lien is valid English rule notice of withdrawal is effective immediately collect freight freight payable on discharge

19[19] Redelivery problems occur in time charters and bareboat charters. 20[20] owner would only consider withdrawal in a rising market

Safe Port Safe Berth21[21] safety of a port ship must be able to reach the port, use the port, and return from the port without being exposed to danger which cannot be avoided by good navigation and seamanship o whether New Orleans is a safe port no answer to this question because it depends on the ship in question ex: this would not be a safe port for an ocean liner, because there is no way it could get into and out of our port warranty of safe port 5th Circuit charterer is held to a duty of due diligence with respect to selecting the port o there is no legal or social policy furthered by having a charterer warrant the safety of the berth it selects. Orduna S.A. v. Zen-Noh Grain Corporation 2nd Circuit, English View charterer is held to an absolute obligation to select a safe berth o charterer in better position to undertake risk/responsibility for where ship goes charterer should bear the risk when is safety of port determined while not such an issue under 5th Circuit reasonable care standard, under British absolute obligation standard, this is a different issue o safe port obligation is judged when order is given, but standard is will the port be safe when the vessel gets there (prospective safety) o if the port is prospectively safe when the order is given, then there is no breach should the port become unsafe. The Evia

21[21] key question in safe port cases what happens if the port was or seemed safe, but turned out not to be safe

VOYAGE CHARTERS
laytime time vessel is permitted to load; if loading time is greater than laytime, owner is entitled to demurrage. The Shipping Corp. of India Ltd. v. Sun Oil Co. o US loading time is called used laytime; laytime is called allowed laytime. free pratique administrative clearance given to a vessel to enter a port; usually a health and quarantine clearance. Pan Cargo Shipping Corp. v. United States o can vessel give notice of readiness when vessel dont have free pratique? o its not just physical readiness that can keep vessel from giving notice of readiness b/c vessel was never ready to load within laytime period, the charterer was entitled to cancel. (See Cancelling Clause (9)). once on demurrage, always on demurrage once allowed laytime has expired, vessel is on demurrage and STAYS on demurrage unless: o specific exoneration clauses in the charter-party o delay attributed to a fault of ship-owner or those for whom he is responsible o vis major22[22] amounting to sudden or unforeseen interruption or prevention of the act itself of loading or discharging, not occurring through the connivance or fault of the charterers vis major almost never happens o charter party often contains clauses which interrupt the running of laytime in case of uncontrollable events why should an event interrupt the running of demurrage? why should exclusions be applied to demurrage? exception clause demurrage does not accrue where delivery of cargo was prevented by cause or causes whatsoever beyond control of charterer, demurrage does not accrue due to port congestion. Orient Shipping Rotterdam B.V. v. Hugo Neu & Sons, Inc. o broadness of clause takes charter-party out of the doctrine of ejusdem generis o clause giving charterer privilege to unload into lighters at anchorage did not obligate charterer to use lighters at anchorage laytime is reversible it doesnt matter if it is loading or discharging it is all laytime o calculable laytime a period of laytime that can be worked out, but not fixed arrived vessel time spent waiting for berth where CP specifies berth, time goes against shipowner; otherwise, goes against charterer o WIBON whether in berth or not turns a berth CP into a port CP o WIPON whether in port or not o WIFPON whether in free pratique or not whether in berth or not essentially means whether in port or not because the boat could not enter the port. Dean H. charter says at or off the port which means vessel may give notice of readiness despite not being in port. Yone Suzuki v. Central Argentine Ry vis major charterer excused from paying demurrage b/c of war ships firing at vessel. Crossman v. Burrill o vis major rarely do vessels not have warning that there is a war at the port into which they will sail; plus, it will be covered by CP. cesser clause unless expressly stated otherwise, a cesser clause is not to be interpreted in such a way to leave shipowner unprotected w/resp. to breach. The Aegis Britannic Voyage Charter Party vs. B/L contract is made before the vessel arrives at loading port o why do we need a B/L when we already have a contract? used for sale of cargo; Voyage CP is not a B/L not negotiable document in order to transfer goods to use as a receipt to tell us exactly how much cargo is on the vessel B/L in the hands of the Charterer is not a contract Charterer already has a contract for the carriage of these goods CP

22[22] vis major an outside force out of the control of charterer

once the B/L is endorsed to the buyer, the B/L is a contract the only contract the only contract to which the buyer is a party contractual obligations shift from CP to the B/L when the B/L is endorsed to the buyer if we are the carrier, this is a problem because carrier has no idea when the B/L is endorsed What is the best way of relieving the carrier's discomfort in this situation? stating in the B/L that CP terms are incorporated into the B/L whomever has the Voyage CP does not have a contract when the B/L is in their possession B/L generally has all of the terms of the CP, and it is upon the CP that the consignee sues upon

PERSONAL INJURY AND DEATH CLAIMS

vessel owner furnishes seaman w/maintenance and cure benefits w/resp. to injury or illness that occurs or manifests itself while seaman in the service of vessel. Gauthier v. Crosby Marine Service, Inc. an indemnity beyond the expense of maintenance and cure is allowed where injuries arise from un-seaworthiness of vessel. The Osceola PRELIMINARY ISSUES Three Sources of Relief for Injury to Seamen o maintenance and cure (& wages) always entitled to this even if not under Jones Act or unseaworthiness wages are a basic component of an award of maintenance and cure. Vickers v. Tumey. where employment contract is for a stated period, rather than a stated voyage, seaman may recover wages for period of employment as part of maintenance. Archer v. Trans/American Services, Ltd. o Jones Act statutory personal injury o un-seaworthiness Seaman vs. Longshoremen o Jones Act Seaman is not entitled to State Worker's Comp.; Longshoremen not entitled to Jones Act relief o no overlap a party is either/or no state relief for Jones Act Seamen state and federal relief for longshoremen though not through Jones Act o there is often difficulty figuring out which the party is Sieracki Seamen o no Jones Act or maintenance and cure not seamen for Jones Act purposes, but still entitled to un-seaworthiness relief probably only pilots

MAINTENANCE CURE AND WAGES23[23] recognition of cause of action o plaintiff's recovery against ship takes the form of additional wages during period of sickness, and is just as proper for a suit [in admiralty] as a claim for additional pay, while in port, or for subsistence in port, where that has been unjustly withheld. Harden v. Gordon. o three elements: subsistence, cure, wages o theoretical basis arise out of service to ship; not fault based responsibility for maintenance and cure o vessel owner if seaman employed by vessel owner o charterer only under a demise charter demise charterer assumes full control of vessel as well as owner's responsibility for maintenance and cure

23[23] vessel owner furnishes seaman w/maintenance and cure benefits w/resp. to injury or illness that occurs or manifests itself while seaman in the service of vessel. Gauthier v. Crosby Marine Service, Inc.

o employer (not vessel owner) liable as employer o vessel owner (not employer) may be liable on an agency theory o vessel liable in rem elements of cause of action o fault or contributory negligence do not impact maintenance and cure exception where fault results from gross negligence or willful disobedience o in the service of the ship does not require presence aboard the ship shore leave extends to injuries occurring during departure on or return from shore leave, though at the time he has no duty to perform for ship. Warren v. United States o whether injury to seaman who drunkenly broke his leg was due to the willful act, default, or misbehavior of the seaman within the meaning of section 2(b) below: Shipowner's Liability Convention24[24] 1. shipowner's liability (a) sickness and injury from time for report to time for termination (b) death resulting from such sickness or injury 2. exceptions (defenses) (a) injury occurred outside service of the ship (b) injury resulting from a willful act, default or misbehavior (c) intentional concealment sickness or infirmity in order for fault of seaman to forfeit right to maintenance and cure, fault must be gross negligence or willful disobedience25[25] contributory negligence is inapplicable intoxication is one exception o seaman status before departure whether a person was a seaman in the service of the ship at time of injury on shore prior to departure of ship, entitling person to maintenance and cure as well as wages. Archer v. Trans/American Services, Ltd. where employee must report to the ship prior to the voyage in order to secure his employment, he gains seaman status as of the moment he is required to report, and is in the service of the ship from that moment on. that employee is not performing duties aboard ship at time of injury does not necessarily deprive employee of seaman status blue water seaman may recover for injuries suffered during shore leave while on personal business. Liner v. J.B. Talley and Co. Inc. o blue water seaman shore leave vs. vacation shore leave protracted vacation shore leave a normal incident of seaman's employment; seaman in the service of the ship protracted vacation it can not be assumed that seaman is answerable to a call of duty, and is thus in the service of the ship o commuter seamen two types live at home and commute to work ferry pilots serve for a fixed time aboard a vessel, then live at home on shore for a fixed time 7 on/7 off; rotating shifts aboard drilling platform Fifth Circuit two factors to be considered in the commuter seaman situation whether or not the seaman was on authorized shore leave when injured whether or not the seaman was answerable to the call of duty scope of duty o prima facie case of maintenance rate Ritchie v. Grimm injured seaman provides evidence of the actual living expenses during convalescence burden shifts to vessel owner/employer to present rebuttal evidence

24[24] 54 Stat. 1693 25[25] intoxication may be one example, but not contributory negligence

maintenance rate total cost of rent + seaman's share of other expenses seaman gets its own living expenses, but not those expenses incurred by seaman's family26[26] o attorney's fees available in maintenance case where employer was callous or recalcitrant double recovery o wages + living expenses double recovery 1. wages remedy only lasts until end of contract, which usually comes to an end relatively soon after injury maintenance and cure last until cured 2. often room and board take place on the ship, and wages reflect this thus maintenance replaces what was provided to seaman aboard vessel punitive damages punitive damages in maintenance and cure actions have been denied in Fifth and Ninth Circuits o underlying idea obligation to pay is so clear, that if the employer doesn't pay they should be hit with something this hit comes in form of attorney's fees, but not punitive damages. Guevara v. Maritime Overseas pre-existing Injury o that injury or illness pre-existed voyage irrelevant to maintenance and cure as long as seaman believed in good faith that he was fit for duty. Gauthier v. Crosby Marine Service o maintenance and cure for plaintiff's illness/injuries may be prorated amongst those for whom injured plaintiff worked and those who he did not while afflicted by the condition last ship rule present employer solely liable for maintenance and cure o where both/all employers are present, last ship rule out the door; unfair to ostensibly innocent shipowners o if one employer is found guilty of negligence or un-seaworthiness, it is solely liable for maintenance and cure stemming therefrom contribution/indemnity. Black v. Red Star Towing & Transportation Co., Inc. o where contract exits b/t shipowner and third party implied warranty of workmanlike performance allows shipowner to recover maintenance and cure costs when warranty is breached o no contractual relationship - shipowner may recover from third party proportional to third party's fault contracts for maintenance and cure o what effect should be given a rate of maintenance which has been fixed in a collective bargaining agreement between a seaman's union and a shipowner? Circuit Split "whether the right to maintenance is a contractual right." Ninth Circuit negotiated rate is binding despite its inadequacy First, Second, Sixth, Ninth, Fifth, Eleventh Third Circuit this is not a right which can be contracted away State Court (which do have the jurisdiction to apply federal maritime law [reverse Erie]) much more firmly in favor of the view that a party can not contract out of the right to maintenance disability and health care plans o does an employer satisfy its legal obligation to pay maintenance when it establishes a disability plan pursuant to a collective bargaining agreement? employer incurs no further obligation where medical treatment is provided by a welfare plan or health insurance pursuant to a collective bargaining agreement no collateral source rule this is not an issue of fault duration of obligation. Farrell v. United States o maintenance and cure old position obligation last as long as the wage obligation o maintenance and cure new position seaman's medical fees are paid until maximum possible cure this could be a bad thing where condition is incurable palliative care does not cure; does not fall under maximum possible cure o

THE JONES ACT27[27] Injury But No Death28[28]

26[26] court awards full rent, as rent would have to be paid if plaintiff lived alone in apartment 27[27] 46 U.S.C. 688

seaman status Wilander/Chandris/Papai Trilogy o pre-Wilander a seaman must: broad contribute to the function of the vessel or to the accomplishment of its mission. 5th Circuit test Robison narrow make a significant contribution to the maintenance, operation, or welfare of the transportation function of the vessel. 7th Circuit test Johnson v. Beasley Construct. o Wilander standard Jones Act does not require a seaman to aid in navigation. McDermott Intern v. Wilander whether under Jones Act or general maritime law, seamen does not include land-based workers LHWCA and Jones Act are mutually exclusive o Chandris two-pronged test employment takes place at sea, but on multiple vessels. Chandris v. Latsis must contribute to the function of the vessel or to the accomplishment of its mission must have a substantial connection to a vessel or group of vessels in navigation that is substantial in terms of both its duration and its nature third element whether vessels are subject to the same ownership and control. Harbor Tug and Barge v. Papai29[29] pilots seaman status denied to pilots o 5th Circuit - Chandris/Papai approach applied to pilots on and off different vessels, no common ownership Brown dissent it seems unreasonable that such an obviously necessary person to the maritime trade would be denied seaman status divers o there are certain classically maritime activities which should be covered by Jones Act, regardless of seaman status test. Wisner v. Professional Divers of New Orleans who is the employer? o because employer-employee relationship is a necessary antecedent to Jones Act claim, only one employer may be sued under Jones Act also no in rem action borrowed servant doctrine o crew of blue water vessels crewing agency is the direct employer usually not employed by vessel owner usually contracted by a crewing agency in country from which the vessel comes this does not mean that crewing agency must be sued seaman is a borrowed servant of the employer, and thus may bring suit key issue control vessel in navigation o preparing boats for navigation vs. not working on vessel in navigation. Desper v. Starved Rock Ferry if vessel is withdrawn from navigation for any substantial period no longer a vessel in navigation o vessel under repair Wixom v. Boland Marine & Manufacturing vessel under repair for over three years not a vessel in navigation workers aboard vessel not seamen o vessel in dry-dock major period of overhaul where vessel is in dry-dock rendered vessel not in navigation for purposes of Jones Act, while vessels undergoing minor repairs or spending a relatively short period of time in dry dock are still considered vessels in navigation. Chandris v. Latsis o vessels undergoing repairs most Circuits vessel undergoing repairs/spending short period of time in dry-dock are not out of navigation vessel vs. work platform o whether a structure is a vessel examination of purpose for which vessel is engaged. 30[30] Manuel v. P.A.W. Drilling & Well Service

28[28] an indemnity beyond the expense of maintenance and cure is allowed where injuries arise from un-seaworthiness of vessel. The Osceola 29[29] Papai is denied relief despite the fact that he makes his living at sea

special purpose vessel despite outward appearance of structure at issue, if a primary purpose is to transport stuff by sea, then it is a vessel transportation function more that merely incidental to the task work platform cases work platform is analogous to a dry-dock carrying stuff across water is NOT central to its purpose work platform (like dry-dock) is an extension of the land gambling structures whether a casino is boat a vessel according to these tests 5th Circuit no purpose of transporting stuff (people) by sea; more like a dry-dock/work platform o if sailing was legally necessary to run the casino, then yes. transportation function 9th Circuit disagrees with 5th Circuit requires no transportation function in order to have Jones Act seamen working on it. Gizoni v. Southwest Marine in the course of his employment seaman does not have to be on the vessel in order to be in the course of his employment Hopson v. Texaco seamen killed, injured in a taxi ride at Port of Spain respondent selected the taxi service; respondent therefore bears responsibility for the injuries stemming from taxi accident important vicarious liability applied to employer for taxi driver

Standard of Care and Causation Gautreaux v. Scurlock Marine correction of the "in whole or in part" wrong turn previous court replaced "in whole or in part" with the word "slightest" to describe the required connection between status and injury subsequent court then used "slightest" in a Jones Act case slightest transforms into "slight negligence" o seems to refer to "the slightest little bit of negligence," which is a very strict standard o only the "slightest bit of fault" need be shown o standard of care becomes "slight care" Ferguson v. Moore-McCormack Lines; Kernan v. American Dredging; Chisholm v. Sabine Towing & Transport

conflicts of law generally resolved by resort to rules established by statute, judicial precedents, or agreements of parties factors to consider in choice of law analysis. Hellenic Lines v. Rhoditis/ Kukias v. Chandris Lines o place of wrongful act o law of the flag o allegiance or domicile of injured seaman o allegiance of defendant shipowner o place where contract of employment was made o inaccessibility of foreign forum o law of the forum

UN SEAWORTHINESS
seaworthiness usual broad concept about gear, cargo handling, fitness of crew, etc., relating to fitness of vessel with respect to ability to carry cargo on the voyage. application of the doctrine o vessel owner has an absolute duty to furnish a vessel and appurtenances reasonably fit for their intended use. Mitchell v. Trawler Racer

30[30] determination of whether a craft is a vessel determined as a matter of law (not a question for a jury)

actual or constructive knowledge of unseaworthy condition is immaterial to liability; knowledge has nothing to do with it. Mitchell v. Trawler Racer among conditions which render a vessel unseaworthy, thus imposing liability on vessel owner for injuries occasioned thereby, are defective gear, appurtenances in disrepair, unfit crew, insufficient number of men assigned to perform shipboard task and improper loading of cargo or storage of cargo. Usner v. Luckenbach Overseas not an obligation to furnish an accident-free ship no less onerous w/resp. to an unseaworthy condition arising after vessel leaves home port liability for un-seaworthiness was not limited by concepts of common-law negligence liability of shipowner based on un-seaworthiness of vessel is wholly distinct from liability based on negligence; there is complete divorcement of un-seaworthiness liability from concepts of negligence. Usner v. Luckenbach Overseas. where longshoreman's injuries were not caused by un-seaworthiness, but by an isolated, personal negligent act of a fellow longshoreman, shipowner was not liable to longshoreman on ground of un-seaworthiness of vessel. Usner v. Luckenbach Overseas o seaworthiness warranty of fitness for duty extends a ship's stores as well as material in which ship's stores were wrapped. Martinez v. Sea-Land Services31[31] there exists no reasoned distinction between a ship's gear (or other material which the doctrine applies to) and a ship's stores o shipowner's liability for unseaworthy vessel may extends beyond members of crew and includes a longshoreman. Usner v. Luckenbach Overseas ship based gear vs. shore based gear. Feehan v. United States Lines o injured or killed by shore based gear not un-seaworthiness of vessel o injured or killed by ship based gear, such as containers, etc. un-seaworthiness of vessel negligence vs. un-seaworthiness. Meyers v. M/V Eugenio C o pilot is a Sieriacki seaman people who are NOT Jones Act seamen, but who none the less have an unseaworthiness remedy. o nonetheless pilot's claim that vessel failed to provide him with a lee to board the vessel asserts negligence in navigation, not un-seaworthiness of the vessel Sieriacki seaman people who has un-seaworthiness remedy, though not a Jones Act seaman damages - comparative fault o comparative fault is applied in strict liability actions for un-seaworthiness. Lewis v. Timco (1983)32[32] applied in both fault and non-fault situations problematic comparing apples and oranges comparing fault in situations which require no fault on part of if plaintiff is at fault, there will always be a reduction based on his fault dissent court should be comparing causal significance rather than fault dissent in (1983) wins the battle but loses the war. Lewis v. Timco (1984)

LONGSHOREMEN AND HARBOR WORKERS Longshore and Harbor Workers' Compensation Act (LHWCA) vs. State Compensation Acts
Jensen line no damages may be recovered for injuries between ship and shore. Southern Pacific v. Jensen

31[31] ordinary seamen could bring an action against ship's owner to recover damages for a back injury sustained when he tried to prevent boxes of soft drinks from falling after a box slipped because the plastic sleeve on one of the boxes was loose. 32[32] products liability case; whether comparative fault applies in a products liability suit

LHWCA/state law twilight zone line of demarcation is unclear as to require case by case assessment of under which regime long shore worker recovers. Davis v. Department of Labor & Industries o practical effect federal statute does not apply to much long-shoring work at all. Nacirema v. Johnson o 1972 Amendment to LHWCA - coverage is expanded to include any adjoining area customarily used by an employer in loading, unloading, repairing, or building in vessel; however longshoremen lose their unseaworthiness claims o this expansion of coverage also creates a choice of claim b/t LHWCA and state law. Sun Ship v. Pennsylvania

Jones Act, LHWCA, and state law o Jones Act and LHWCA mutually exclusive zone of uncertainty where occupation exhibits elements of both land and sea duties. McDermott v. Boudreaux o Jones Act and state law seaman not eligible for state workers' comp b/c of Jensen line o LHWCA and state law choice of claim where overlapping. Sun Ship v. Pennsylvania LHWCA employee any person engaged in maritime employment including longshoreman, other people involved in Longshore operations, including harbor workers, but not master or member of any crew of any vessel. o LHWCA status does not preclude Jones Act status; Jones Act status does preclude LHWCA status. Southwest Marine v. Gizoni LHWCA Status and Situs Requirement o two-part situs and status standard. P.C. Pfeiffer v. Ford situs test upon navigable waters of the United States, including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, or building a vessel. 3(a), 33 U.S.C. 903(a). injury on actual navigable waters of the United States (not expanded definition) eliminates need to show that employment bears a direct and substantial relation to navigation or commerce. Director v. Perini North River Associates. o narrowed Perini by excluding situations in which worker's presence on the water was either transient or fortuitous. Bienvenu v. Texaco status test engaged in maritime employment 2(3), 33 U.S.C. 902(3). offshore drilling is not maritime activity, nor does any task essential thereto necessarily constitute maritime employment. Herb's Welding v. Gray o employees who are not engaged in loading, unloading, repairing or building vessel are not covered by LHWCA by virtue of presence in area adjoining navigable waters used for such activity. Sieracki analysis pilots engaged in seaman's work and exposed to typical seaman's dangers; pilots have remedy for un-seaworthiness, but not remedy under LHWCA o pilots are the only people who clearly fall into this category. Blancq v. Hapag-Lloyd A.G. o Exclusive Liability of the Employer o employer is required to have insurance for claim compensation under LHWCA. failure to carry insurance may allow employee to sue employer directly o employer's sole liability is through this compensation remedy LHWCA does not, however, take away the right to sue a (vessel) third party; both remedies are available if injury is caused by negligence of the vessel, then injured may sue the vessel as a third party o action against a non-vessel third party. Grantham v. Avondale Industries o under state law, Avondale would be employer of plaintiff; under LHWCA, Avondale is not the employer state law says Avondale is immune from suit as the employer; federal law says Avondale is not immune o Garvin v. Alumax of South Carolina where plaintiff proceeds under state law, state law is applied bar none, and employer should be immune (holds the opposite) Suits Against Ship-owners

shipowner may be sued at admiralty for negligently inflicting injuries on a maritime worker contributory negligence is not a bar to recovery; does result in mitigation of damages Sieracki Doctrine - injured longshoreman may recover in suiit against a ship-owner for un-seaworthiness of vessel ship-owner may then seek indemnity from employer o longshoreman may recover on un-seaworthiness for injury suffered on a pier where injury was caused by an instrumentality of the vessel however, under 1972 Amendments, longshoreman's action under LHWCA can not be grounded on unseaworthiness Ship-owners Liability for Negligence o LHWCA 905(b) limits owner's liability to those injuries caused by negligence of the vessel o Scindia Standards ship-owner's responsibility to longshoremen outset of cargo operations eliminating dangerous conditions which exist at outset of cargo operations, and warning of dangerous conditions which would become known in the exercise of reasonable care during cargo operations no duty to exercise reasonable care to discover dangerous conditions that develop within the confines of the cargo operations where owner is actively involved in cargo operations, and has constructive knowledge of hazard, owner may be held liable to longshoreman. Lampkin v. Liberia Athene Transport stevedore is responsible for hazardous conditions which arise during cargo operations o exception to the rule ship-owner has duty to intervene and repair, as if it existed from the outset, a dangerous condition of which owner actual knows and should realize that if presents an unreasonable risk of harm to the longshoreman. o turnover duty duty to warn of latent defects w/resp. to cargo latent hazards hazards not known and that would be neither obvious to, nor anticipated by, a skilled stevedore in competent performance of its work. Howlett v. Birkdale Shipping Contribution and Indemnity o employee can not sue employer-stevedore o can sue shipowner can shipowner pass on burden from suit to the employer-stevedore shipowner is not doing very much; the employer-stevedore is doing most of the work LHWCA 905(b) Negligence of Vessel no warranty based concept of indemnity o shipowner indemnity from employee would be inconsistent with the concept of workman's comp being the sole remedy against employer o in cases of shipowner/stevedore, determination as to "in what capacity was this person at fault" must be made Edmonds v. Compagne Generale Transatlantique if fault connected to role as stevedore, then no recovery if fault connected to role as shipowner, then recovery may be had collateral source rule does not apply because of the employee's lien on employee's recovery o liability of non-settling defendants no credit given to non-settling defendants credit for dollar amount of settlement. McDermott v. Amclyde Stevedore's Lien and Assignment of the Employee's Action o Bloomer Rule under 33 U.S.C. 933 stevedore is entitled to full reimbursement for amount paid out in compensation where employee recovers from third party the longshoreman's attorney's fees are his own burden to bear Suits Against Non-Ship-owner Third Parties o Holland v. Sea-Land Services o o o

WRONGFUL DEATH33[33] general maritime law no cause of action. The Harrisburg

33[33] wrongful death vs. survival statutes survival statutes allow deceased's estate to prosecute any claims deceased would have had but for his death; no recovery under survival statutes for harm's suffered by deceased's family. Michigan C.R. v. Vreeland

o fill the gap with application of state law wrongful death statute. The Hamilton high seas o 1920 Death on the High Seas Act (DOHSA)34[34] - wrongful death caused by negligence or unseaworthiness. Bodden v. American Offshore wrongful death of non-maritime persons DOHSA wrongful death of seamen DOHSA (un-seaworthiness) and Jones Act (negligence) o coverage of DOHSA plaintiffs may recover only pecuniary loss, including loss of service and loss of support. Mobile Oil v. Higginbotham no punitive damages applies in foreign territorial waters as well as the high seas. Howard v. Crystal Cruise Line applies only to maritime torts. Brons v. Beech Aircraft o DOHSA vs. state remedies DOHSA pre-empts state wrongful death statutes recovery not available under state statutes where DOHSA applies. Offshore Logistics v. Tallentire DOHSA does not preclude application of state law to wrongful death actions arising from accidents on offshore platforms. state territorial waters o Moragne action35[35] wrongful death caused by un-seaworthiness and negligence wrongful death of longshoreman Moragne v. States Marine Lines wrongful death of seaman Miles v. Apex Marine wrongful death of non-maritime worker Yamaha Motor v. Calhoun o DOHSA vs. Moragne DOHSA exclusive on the high seas and is not supplemented by the general maritime law o Moragne action vs. state law remedy Moragne action does not displace state law for death of non-maritime worker. Yamaha Motor v. Calhoun state remedies are applied to maritime wrongful death cases where: o no federal statute specifies the appropriate relief, and o decedent was not a seaman, longshore worker, or person otherwise engaged in a maritime trade; these remedies are not displaced by the Moragne rule. admiralty jurisdiction does not result in automatic displacement of state law survival actions o high seas no survival action at admiralty is available for death on the high seas. Dooley v. Korean Air Lines lone survival action under DOHSA if deceased files suit before dying, survivors can take over the suit if Congress had wanted there to be a broader survivor suit, they would have created one FELA provides a survivor action for Jones Act seaman implicit holding of Dooley state survival action also precluded on the High Seas by DOHSA o state territorial waters unclear whether a survival action is ever maintained under general maritime law. Dooley v. Korean Air Lines restrictions on damages o loss of society and lost future earnings are not recoverable in general maritime cause of action for wrongful death of seaman. Miles v. Apex Marine Sea-Land Services v., Gaudet death of longshoreman in territorial waters implicates neither Jones nor DOHSA dependant plaintiff in a maritime wrongful death action could recover for pecuniary losses of support, services, and funeral expenses, plus loss of society resulting from the death Mobil Oil v. Higginbotham death of longshoreman on high seas implicates DOHSA recoverable damages resulting from wrongful death limited to pecuniary loss sustained by the persons for whose benefit the suit is brought.

34[34] 46 U.S.C. 761-768; est. cause of action for death caused by wrongful act, neglect, or default occurring on high seas beyond a marine league from the shore of any State 35[35] creates maritime lien; allows suit in rem or in personam

Jones Act death of seaman on territorial waters applies to seaman killed as a result of negligence and does not permit recovery for loss of society in wrongful death action recovery by decedent for his injuries does not preclude recovery by decedents widow for wrongful death. Bodden v. American Offshore

REMEDIES OF NON-MARITIME PERSONS

Duty and Standard of Care Generally passengers remedy for injury due to fault of vessel general maritime claim fault or nothing Athens Convention not ratified by U.S. because of strict but limited liability U.S. fault, and only fault o shipowner owes a duty of exercising reasonable care toward the persons lawfully present aboard the vessel Kermarec duty of exercising reasonable care under circumstances of each case standard of care is only applicable where injured person was lawfully present aboard the vessel subcategories o shipowner may be absolutely liable for the intentional torts of the members of its crew. Morton v. De Oliveira o shipowner may be liable for negligence of on-board physicians. generally not held doctor has independent duty to the passengers, provided doctor is competent minority view ship owner liable no matter what Choice of Law: Choice of Forum Clauses forum selection clause is not barred as equivalent to vessel contracting out of liability Carnival Cruise Lines v. Shute o forum selection clause is presumptively valid, and will be enforced unless somehow unfair o cancellation fee if fee is incurred b/c customer doesnt like the forum selection clause, this is an exception to Shute Products Liability strict products liability is part of general maritime law. East River Steamship v. Transamerica Delaval COLLISION AND OTHER ACCIDENTS Liability Inevitable Accident The Jumna if no negligence can be shown on the part of either party, and is the result of no fault of either party whether collision could have been prevented by the exercise of ordinary care, caution, and maritime skill need not be result of vis major however where two vessels collide, courts generally say that both are at fault The Louisiana presumption of fault on part of moving vessel which strikes a stationary object vessel will be liable unless she can show affirmatively that drifting was result of inevitable accident, or a vis major, which human skill and precaution, and a proper display of nautical skill could not have been prevented Error in Extremis Puerto Rico Ports Authority v. M/V Manhattan Prince doctrine of in extremis where one ship has, by wrong maneuvers, placed another ship in a position of extreme danger, that other ship will not be held to blame if she has done something wrong, and has not been maneuvered with perfect skill and presence of mind o judgment of competent sailor in extremis can not be impugned

o doctrine only available when party asserting it was free from fault until emergency arose negligence holding o presumption of negligence against all parties participating in the management of vessel because vessel was moving and collided with a stationary object o vessel in extremis overcame the presumption vessel is responsible for this showing vicarious liability for actions of pilot ship owner gets nothing for damage to vessel o pilot employer not vicariously liable for actions of pilot (pilot held to be self-employed) o ship in rem vicariously liable for actions of compulsory pilot o ship owner is not vicariously liable in personam for negligence of compulsory pilot

Allocation of Fault The Modern Rule United States v. Reliable Transfer adoption of proportional allocation of fault when two or more parties have contributed by their fault to cause property damage in a maritime collision or stranding, liability for such damage is to be allocated among the parties proportionately to the comparative degree of their fault, and that liability of such damages is to be allocated equally only when the parties are equally at fault or when it is not possibly fairly to measure comparative degree of their fault Proximate Cause Exxon v. Sofec affirmation of requirement of legal or proximate causation, and related superceding cause doctrine, applied in admiralty notwithstanding our adoption of the comparative fault principle Violation of Safety Standards: The Pennsylvania Rule Candies Towing v. M/V B & C Eserman where a vessel is guilty of a statutory violation, defaulting ship must show that her fault could not have been one of the causes o as opposed to merely might not have been, or probably was not o presumption of causal significance not actually a presumption of fault burden is on the ship in violation of the statute to show that its violation could not have been one of the causes of the accident Otto Candies v. M/V Madeline D the Pennsylvania Rule Damages Total and Partial Losses partial loss = cost of repair + loss of use (potentially much greater than repair cost) best circumstances under which to measure loss of use under a time charter (ship goes off-hire) another approach to calculate what ship would have earned during period look at market freight rates Economic Loss average earnings over period of loss of use three voyage rule one before collision, one after collision, and the voyage on which collision occurred. Moore-McCormack Lines v. The Esso Camden o rule of thumb, not rule of law demurrage is recoverable only when profits have actually been, or may reasonable be, supposed to have been lost, and such profits can be calculated to a reasonable certainty o key question which market freight rate is used only post-collision rates should be used to calculate damages plaintiff only pre-collision rates should be used to calculate damages

either owner or time charterer, but not both, may claim damages for loss of use depending upon charter's placement of risk of loss or use. Venore Transport v. M/V Struma o Robins Dry Dock Rule bright line rule only person who suffers injury may recover damages in a collision o where time charterer continues to pay hire, and there is no fear of indeterminate loss, Robins Dry Dock may be avoided in favor of rule which properly recognizes that time charterer is the bearer of risk and loss, and recovery in favor of shipowner would result in a windfall for shipowner many plaintiffs suffer economic loss as result of PCP spill, but none of them suffered physical damage to property. State of Louisiana, ex rel. Guste v. M/V Testbank o all purely economic loss claims fail in absence of damage to proprietary interest as a result of Robins Dry Dock. o Court finds special exception for commercial fishing interests commercial fishermen need special protection o Williams (concurring); Ruben (dissenting) allowing these claims undermines Robins Dry Dock.

Lessees and Proprietary Interest Total Loss A&S Transportation v. The Tug Fajardo actual total loss vs. constructive total loss o actual total loss ship is literally gone (sunk, destroyed) o constructive total loss ship is still in tact, just unavailable to extent that cost of retrieval exceeds value of ship damages at total loss o loss of freight still owed o loss of use not allowable where shipowner does routine work while ship is laid up for collision repairs shipowner takes windfall, does not have to account to collision repairer, unless collision repairs take longer than they otherwise would